The pound fell for the first time in seven days against the dollar and dropped versus the euro after the Bank of England said it will spend an additional 50 billion pounds ($75 billion) of newly printed money to spur growth. Gilts pared losses that earlier pushed the 10-year bond yield to the highest level in almost three months. The Bank of England said it will increase its asset purchase program to 125 billion pounds while keeping the target lending rate at a record low of 0.5 percent. “The Bank of England’s move today was a surprise for sterling,” said Simon Derrick, chief currency strategist at Bank of New York Mellon Corp. in London. The pound declined as much as 1.4 percent to 89.34 pence per euro before trading at 89.24 pence at 2:39 p.m. in London, compared with 88.09 pence yesterday. It slipped 0.6 percent to $1.5047 after climbing 0.4 percent to $1.5197, the strongest level since Jan. 9. Losses by the pound may present “a buying opportunity,” and the currency may rise to as high as $1.55 in the next month, Derrick said. The 10-year yield increased 10 basis points, or 0.10 percentage point, to 3.70 percent, after earlier rising as much as 16 basis points to 3.76 percent, the highest level since Feb. 11. The 4.5 percent security due in March 2019 slipped 0.85, or 8.5 pounds per 1,000-pound face amount, to 106.56. The two-year yield climbed three basis points to 1.19 percent. Bond yields move inversely to prices. ‘Some Certainty’ “It’s pretty good that they came out with a number for further purchases,” said Jason Simpson, a U.K. interest-rate strategist at Royal Bank of Scotland Group Plc in London. “The downside could be that there is a hint 50 billion will be it, but the fact that they came up with a number gives the market some certainty.” The nine-member Monetary Policy Committee, led by Governor Mervyn King, cut the benchmark rate three times this year and shifted focus to raising the money supply as the cuts lost their potency. The U.K.’s main rate is still higher than the Federal Reserve’s benchmark, which is in a range of zero to 0.25 percent, and the Bank of Japan’s target of 0.1 percent. The European Central Bank cut its key rate by a quarter-percentage point to 1 percent today. Bonds dropped this week on evidence the recession may be easing. Reports yesterday showed services industries contracted less than forecast last month while consumer confidence rose.

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